Measuring hospital efficiency with Data Envelopment Analysis: nonsubstitutable vs. substitutable inputs and outputs.

There is a conflict between Data Envelopment Analysis (DEA) theory's requirement that inputs (outputs) be substitutable, and the ubiquitous use of nonsubstitutable inputs and outputs in DEA applications to hospitals. This paper develops efficiency indicators valid for nonsubstitutable variables. Then, using a sample of 87 community hospitals, it compares the new measures' efficiency estimates with those of conventional DEA measures. DEA substantially overestimated the hospitals' efficiency on the average, and reported many inefficient hospitals to be efficient. Further, it greatly overestimated the efficiency of some hospitals but only slightly overestimated the efficiency of others, thus making any comparisons among hospitals questionable. These results suggest that conventional DEA models should not be used to estimate the efficiency of hospitals unless there is empirical evidence that the inputs (outputs) are substitutable. If inputs (outputs) are not substitutes, efficiency indicators valid for nonsubstitutability should be employed, or, before applying DEA, the nonsubstitutable variables should be combined using an appropriate weighting scheme or statistical methodology.

Improving the efficiency of distributive and clinical services in hospital pharmacy.

Three problems impede the assessment of hospital pharmacy efficiency. First, although multiple efficiency indicators are utilized to measure a large variety of activities, it has not been possible to validly measure overall efficiency. Second, there have been no widely-used clinical activity indicators, so key outputs often have not been accounted for. Third, there has been no effective methodology for identifying when declines in efficiency are normal random variations and when they represent true decreases in performance. This paper presents a procedure that simultaneously addresses these three problems. It analyzes data from a group of U.S. hospital pharmacies that collect an inclusive set of clinical and distributional indicators. It employs Data Envelopment Analysis to develop comprehensive efficiency measures from the numerous outputs and inputs. It applies statistical Panel Data Analysis to estimate confidence intervals within which each pharmacy's true efficiency resides, and to develop control charts for signaling when a pharmacy's efficiency has declined by more than can be attributed to random variation. This integrated efficiency evaluation system is transferable to other hospital pharmacy systems, thereby offering decision makers a better way of measuring, controlling and improving hospital pharmacy efficiency.

Association between hospital size and pharmacy department productivity.

PURPOSE: The purposes of this study were to characterize and quantify workload and productivity in hospitals according to their size, to establish comparative statistics useful for pharmacy administrators as a means to contrast their efficiency to that of other hospitals of similar sizes, and to provide data to enable policymakers to better assess staffing and resource needs. METHODS: A 50-item Web-based survey designed to illicit information about pharmacy department staffing, workload, and productivity was sent electronically to 242 members of Consorta, Inc., a group-purchasing organization. Responses were received from 110 organizations, a response rate of 45.5%. The responses were categorized into three groups according to the number of staffed beds and were profiled and compared using descriptive and inferential statistics. RESULTS: Pharmacy department workload and expenditures were primarily a function of hospital size: Hospital volume statistics, pharmacy expenditures, hours of operation, pharmacy full-time equivalents (FTEs), and dispensing workload all are highly dependent on the size of the facility. The range of clinical services provided by small, medium, and large hospitals did not differ with the exception of a few services provided more often in larger hospitals. Overall productivity ratios demonstrated greater efficiency among larger hospitals. In terms of costs, pharmacy and hospital expenditures per occupied bed and per admission generally decreased as hospital size increased. CONCLUSION: Results of a survey suggested consistency in clinical services provided by hospitals of varying size and increased productivity with increasing hospital size. Respondents employed fewer FTEs than those in other national surveys.

Monitoring of pharmacy staffing, workload, and productivity in community hospitals.

PURPOSE: The purpose of this survey was to identify and characterize pharmacy productivity monitoring systems used in community hospitals that were part of a national group purchasing organization (GPO). METHODS: A 50-item questionnaire was developed, pretested, and sent electronically to the directors of pharmacy at 242 member hospitals of Consorta, Inc., a national GPO. The questionnaire was designed to elicit information on (1) hospital pharmacy demographics, (2) systems used to measure hospital pharmacy productivity, and (3) staffing levels and workload. Hospital demographic data were also obtained for respondent and nonrespondent hospitals from the American Hospital Association's AHA Guide. Descriptive statistics, Student's t tests, and chi-square tests were used to characterize the data and compare respondents with nonrespondents. RESULTS: Responses were received from 110 hospitals (45.5%). No clinically significant differences were found when respondent and nonrespondent hospitals were compared based on AHA Guide data. The productivity workload ratios monitored most often by respondent hospitals were full-time equivalents (FTEs) per adjusted patient day, FTEs per dose dispensed, and FTEs per dose billed. Respondents reported a mean +/- S.D. of 21.90 +/- 18.83 actual FTEs and total doses dispensed, billed, or administered per year of 111,391.4 +/- 111,538.0. A major limitation of the productivity systems used in the hospitals was the inability of the systems to account for clinical services performed by the pharmacy staff. CONCLUSION: A survey of community hospitals indicated that although most engaged in productivity monitoring, systems for such measurement often failed to capture all relevant clinical workload data.